Figures from Eurostat show that retail sales fell by 2.5% in the 17-nation eurozone between November 2010 and 2011, and by 1.3% across the 27-member European Union during the same period.

One casualty of the sales slump was UK based supermarket giant, Tesco -- the world's third largest retailer -- which was forced to offer a profit warning in the wake of a disappointing UK Christmas trading period. It saw a 2.3% fall of like for like sales on the previous year.

Richard Perks, director of Retail Research at industry analysis company MINTEL, said Europe's luxury brands have remained relatively unaffected by reduced retail spending because the global consumer base for luxury goods is growing.

Perks told CNN an increasing numbers of wealthy consumers in regions such as Asia are driving demand for Europe's most renowned luxury brand name products.